Opposition Brief — Becker v. United States

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No. 92-410 |

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In the Supreme Court of the Anited States

OCTOBER TERM, 1992

FRANK QO. BECKER, PETITIONER

v.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES

KENNETH W. STARR

Solicitor General

JAMES A. BRUTON

Acting Assistant Attorne y General

ROBERT E. LINDSAY

ALAN HECHTKOPE

GAIL BRODFUEHRER

Attorneys

Department of Justice

Washington, D.C. 20530

(202) 514-2217

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QUESTIONS PRESENTED

1. Whether Congress intended to permit cumulative

punishments for the offenses of willfully attempting to

evade tax, in violation of 26 U.S.C. 7201, and failure to

file a tax return, in violation of 26 U.S.C. 7203.

2. Whether the government’s use of evidence regard-

ing petitioner’s failure to pay his taxes constructively

amended the indictment.

3. Whether the Constitution prohibits a court from

enhancing a defendant’s sentence under Sentencing

Guidelines § 3C1.1 if the court finds that the defendant

committed perjury at trial.

4. Whether the district court properly instructed the

jury, under Cheek v. United States, 111 S. Ct. 604 (1991),

that petitioner did not act willfully if he “actually” be-

lieved that his conduct was lawful, even if his belief was

not objectively reasonable.

TABLE OF CONTE 7S

Page

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TABLE OF AUTHORITIES

Cases:

Albernaz v. United States, 450 U.S. 333 (1981) ............ 7,8, 9, 12

Ball v. United States, 470 U.S. 856 (1985) ................. 10, 14

Blockburger v. United States, 284 U.S. 299 (1932) .......... 9 10

Brown v. Ohio, 432 U.S. 161 (1977) ......cccccccccccccoeecccoeccccs. 7

Cheek v. United States, 111 S. Ct. 604 (1991) ................... 5, 19, 20

Garrett v. United States, 471 U.S. 773 (1985) .................. 8, 10, 12

Gaunt v. United States, 184 F.2d 284 (1st Cir. 1950),

OEPe. Geared, SER U.S. BIT (USGI) ....cccc.csccccscesssccccsccossscss 11

Jeffers v. United States, 432 U.S. 187 (1977) coccccccccccccceeee 7

Jones v. Thomas, 491 U.S. 376 (1989) .....000000000000.-.....-. 7

Missouri v. Hunter, 459 U.S. 359 (1983) ......................... 1. os.

Ohio v. Johnson, 467 U.S. 498 (1984) ........00..0..00--0-- 7,9, 12

Sansone v. United States, 380 U.S. 348 (1965) ................ 10

Schmuck v. United States, 489 U.S. 705 (1989) ............... 13

Spies v. United States, 317 U.S. 492 (1943) ..................... 9,17

Stirone v. United States, 361 U.S. 212 (1960) .................. 15

United States v. Aitken, 755 F.2d 188 (1st Cir. 1985) ...... 2]

United States v. Barnett, 945 F.2d 1296 (5th Cir. 199] ),

Orme. comme, 298 SS. Cb. FART (IGOR) oovcciceccccrccecoscc lee 2()

United States v. Boone, 951 F.2d 1526 (9th Cir. 198)1)...... 13

United States vy. Buckley, 586 F.2d 498 (5th Cir. 1978),

cert. denied, 440 U.S. SB2Z (1979) ........cccccccccscossscsscsscosese 1]

United States vy. Collins, 920 F.2d 619 (10th Cir. 1999),

ee een, SEE Oe, Ge, We CIOON) oc cocesccc sce 2()-21

(III)

IV

Cases—Continued: Page

United States v. Cook, 505 F.2d 659 (5th Cir. 1974), cert

denied, 421 U.S. 1000 (1975) ...........c:eeeeeeeeeeeeeeeeeeeeeneeees 13

United States v. Davis, 679 F.2d 845 (11th Cir. 1982),

cert. denied, 459 U.S. 1207 (1983) «2.2.0... eeeeeeeeeeeee eee eeeees 15

United States v. Doyle, 956 F.2d 73 (5th Cir. 1992) ........- 12-13

United States v. Dunn, 758 F.2d 30 (1st Cir. 1985) .......... 15

United States v. Dunnigan, No. 91-1300 (Dec. 2, 1992) .... 18

United States v. Foster, 789 F.2d 457 (7th Cir.), cert.

denied, 479 U.S. 883 (1986) ........::eeeeeeeeeeeeteeeeersrteeeeeneenes 6, 9, 10

United States v. Gengo, 808 F.2d 1 (2d Cir. 1986) ..........-. 12

United States v. Halper, 490 U.S. 435 1989) ....-....seeeeeee 6-7

United States v. Hathaway, 798 F.2d 902 (6th Cir.

DORE) oo occccccocccvevsccnnveccensovevtsethucsevescaenedecsenssanenernesseseesens 15

United States v. Kaiser, 893 F.2d 1300 (11th Cir. 1990) .. 11

United States v. Lodwick, 410 F.2d 1202 (8th Cir.), cert.

denied, 396 U.S. 841 (1969) ..........ecceeeeeeeeee eee eeeeen een eeeeee es 11

United States v. Masat, 896 F.2d 88 (5th Cir. 1990) ....... 17

United States v. Mollica, 849 F.2d 723 (2d Cir. 1988) ...... 15

United States v. Newman, 468 F.2d 791 (5t h Cir. 1972),

cert. denied, 411 U.S. 905 (19738) «00.0... ce eeeeeeeeeeeeeeeeeeeees 11

United States v. Payne, 800 F.2d 227 (10th Cir. 1986) ..... 2]

United States v. Powell, 955 F.2d 1206 (9th Cir. 1992) .... 2]

United States v. Rosenthal, 454 F.2d 1252 (2d Cir.), cert

denied, 406 U.S. 931 (1972) ........ceceeeeeeeeeeeeeeeeeeeeeeneere ees 11

United States v. Slutsky, 487 F.2d 882 (2d Cir. 1973),

cert. denied, 416 U.S. 937 (1974) ........::eeeeeeeeeeeeeeeeeeteeees 12

United States v. Snyder, 766 F.2d 167 (4th Cir. 1985) ..... 11

United States v. Turano, 802 F.2d 10 (Ist Cir. 1986) ....... 2]

United States v. Von Stoll, 726 F.2d 584 (9th Cir. 1984) . 15

United States v. Waldeck, 909 F.2d 555 (st Cir. 1990) ... 17

United States v. Whiteside, 810 F.2d 1306 (5th Cir.

OT) oo pcacdnaandunivusdensunnmavenrenabeneneseseserabnaavasessestes 2]

Whalen v. United States, 445 U.S. 684 1.) icine 7

Constitution, statutes and regulations: Page

U.S. Const. Amend. V (Double Jeopardy Clause) ............ 6, 7, 15

Sentencing Reform Act of 1984, 18 U.S.C. 3551 et seq. .... 13

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Miscell: neous:

2 KE. Devitt, C. Blackmar, & K. O'Malley, Federal Jury

Practice and Instructions (Ath ed. 1990)

Jn the Supreme Court of the United States

OcTOBER TERM, 1992

No. 92-410

FRANK O. BECKER, PETITIONER

,

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES

OPINION BELOW

The opinion of the court of appeals (Pet. App. 1-14)

is reported at 965 F.2d 883.

JURISDICTION

The judgment of the court of appeals was entered on

June 5, 1992. The petition for a writ of certiorari was

filed on September 3, 1992. The jurisdiction of this

Court is invoked under 28 U.S.C. 1254(1).

STATEMENT

Following a jury trial in the United States District

Court for the Northern District of Illinois, petitioner

was convicted on six counts of willfully attempting to

evade taxes, in violation of 26 U.S.C. 7201, and six

(1)

counts of willfully failing to file income tax returns,

in violation of 26 U.S.C. 7208. He was sentenced to

three years’ imprisonment on the tax-evasion counts

and to a consecutive term of three years’ imprison-

ment on the failure-to-file counts, to be followed by

three years’ supervised release. He was also fined

$100,000 and ordered to pay the costs of prosecution.

Pet. App. 15-16.

1. The evidence at trial established that from 1982

through 1987, petitioner, a medical doctor, earned in

excess of $850,000. Petitioner had three sources of

income: he was a salaried physician on the staff of

Christ Hospital in Oak Lawn, Illinois; he received

honoraria for delivering lectures at the Cook County

Graduate School of Medicine; and he maintained a

part-time private practice outside the hospital. Pe-

titioner’s private patients were billed by John Mock &

Associates (JMA) on his behalf. Pet. App. 1-2.

Petitioner provided the relevant information re-

garding each patient to JMA, and JMA then billed

either the patient or the patient’s insurance company.

The payment checks were remitted to JMA. Prior to

January 1982, JMA deposited the checks into peti-

tioner’s bank account. Subsequently, however, peti-

tioner directed JMA to send him the checks, unen-

dorsed and undeposited. Beginning in 1982, petitioner

eliminated each of his bank accounts, and after 1983,

he had his employer, Christ Hospital, stop with-

holding any federal taxes from his earnings. Pet.

App. 2.

From 1982 through 1984, petitioner deposited his

paychecks into National Commodity Exchange

(NCE), a Colorado-based “warehouse bank,” in which

+

~~

accounts are identified only by an account number.

NCE’s customers would deposit checks into num-

bered accounts and, at the customers’ direction, NCE

would write checks on their behalf. The checks would

be issued in the name of NCE or one of its sub-

sidiaries. From 1985 through 1987, petitioner de-

posited the majority of his income checks into a

checking account held by his son, Steven Becker, at

the Peotone Bank in Illinois. Pet. App. 2.

sefore the 1981 tax year, petitioner had retained an

accountant to file his tax returns, but he ceased using

the accountant after that year. Although petitioner

owed more than $300,000 in taxes on the income he

earned during the years covered by the indictment, he

did not pay any income taxes or file any tax returns

during those years. At trial, petitioner testified that

he stopped filing income tax returns and paying

income taxes because he had determined that he was

not required to do so. Petitioner stated that he

believed the money he earned from his medical

practice did not constitute gross income. He testified

that he had consulted with an attorney, Robert L.

Collins, who had confirmed that interpretation of the

Internal Revenue Code. Petitioner also said that he

had instructed Christ Hospital to stop withholding

federal taxes from his paychecks because, after 1983,

he considered himself an independent contractor.

Petitioner admitted that he had deposited checks at

NCE, that he had endorsed checks to his son for

deposit in his son’s bank account, and that he did not

keep any records of his transactions with JMA or

NCE. Pet. App. 2-8.

SS ee

4

At sentencing, the district court found that peti-

tioner had lied when he testified at trial.!. The court

therefore enhanced his offense level by two levels on

the ground that, by committing perjury at trial, he

had obstructed justice within the meaning of

Sentencing Guidelines § 8C1.1. Pet. App. 12-13. The

two-level enhancement increased petitioner’s offense

level from 17 to 19. With a criminal history category

of I, petitioner was subject to a sentencing range of

30-37 months’ imprisonment on the tax-evasion

counts (26 U.S.C. 7201). Pet. C.A. Br. App. 6. The

district court sentenced petitioner to three years’

imprisonment on those counts, and to a consecutive

period of 36 months’ imprisonment on the failure-to-

file counts (26 U.S.C. 7203)2 Pet. App. 15-16.

2. The court of appeals affirmed. Pet. App. 1-14.

The court rejected petitioner’s claim that, with

respect to the charges under 26 U.S.C. 7201, the

government had constructively amended the indict-

ment by introducing evidence of petitioner’s at-

tempted evasion of the payment of taxes. The court

noted that the indictment charged petitioner with

attempting to evade his taxes, not only by failing to

' The trial judge found that petitioner had “perjured

himself in a gross, utterly unconvincing and blatant fashion.

*** He is simply not to be believed * * * and his testimony

was offered in a manner and form which I think is contemptu-

ous of the ability of both the jury and the Court to determine

the truth.” Pet. App. 18 (ellipses in original).

* The district court determined that the failure-to-file

counts were governed by pre-Sentencing Guidelines law.

Accordingly, the court found that it had discretion to make the

sentence on those counts run consecutively to the sentence on

the tax-evasion counts. Pet. C.A. Br. App. 15-16, 18.

»

file income tax returns, but also by failing to pay

taxes, in violation of Section 7201. Moreover, the

court noted that “Section 7201 creates only one

crime: tax evasion.” Pet. App. 4 (internal quotation

marks omitted). Accordingly, the court concluded, the

government’s submission of evidence that petitioner

failed to pay his taxes did not constructively amend

the indictment. /bid.

The court of appeals also rejected petitioner’s claim

that the trial court erred in refusing to give his

proposed “good faith” instruction. The court of

appeals held that the instruction given was “an

accurate summary” of this Court’s decision in Cheek

v. United States, 111 S. Ct. 604 (1991). Pet. App. 8.

The court also noted that petitioner’s trial counsel

had advised the district court that the instruction

that the jury received was “essentially a correct

statement of the law.” Jbid.

Finally, the court of appeals rejected petitioner’s

challenges to his sentence. First, the court held that

the trial judge’s finding that petitioner’s trial

testimony was perjurious was supported by the rec-

ord. Accordingly, the court held that the two-level

upward adjustment to the offense level was not

clearly erroneous. Pet. App. 12-13.

Second, the court of appeals held that the trial

court did not err in imposing consecutive sentences

for petitioner’s violations of 26 U.S.C. 7201 and 26

U.S.C. 7208. Pet. App. 13-14. In so holding, the court

rejected petitioner’s contention that the willful

failure to file tax returns, in violation of Section 7203,

constituted a lesser included offense of attempted tax

evasion, in violation of Section 7201. The court stated

6

that each of the statutes required proof of a fact that

the other does not, and that “there is no indication

that Congress did not intend these two statutory

provisions to be separate offenses.” Pet. App. 14,

quoting United States v. Foster, 789 F.2d 457, 460 (7th

Cir.), cert. denied, 479 U.S. 883 (1986).

ARGUMENT

1. Petitioner contends (Pet. 5-11) that the district

court’s imposition of consecutive sentences under 26

J$.C. 7201 and 26 U.S.C. 7208 violated his rights

under the Double Jeopardy Clause of the Fifth

Amendment. He argues that the misdemeanor of

failing to file a tax return (Section 7203) is a lesser

included offense of the felony of tax evasion (Section

7201) and that the Constitution prohibits cumulative

punishment in the same proceeding for a greater and

lesser included offense. That contention is incorrect

and does not warrant this Court’s review.

a. The Double Jeopardy Clause protects against “a

second prosecution for the same offense after

acquittal’ a Second prosecution for the same offense

after conviction; and multiple punishments for the

same offense.” United States v. Halper, 490 U.S. 435,

* Petitioner also argued, inferalia, that evidence was

improperly admitted on the-tax-evasion counts; that witnesses

were permitted to speculate and that the judge erred in failing

to give a cautionary instruction on that issue; that the jury was

improperly instructed on the Section 7201 charges; that the

jury should have been instructed on petitioner’s advice-of-

counsel defense; that the Speedy Trial Act was violated; and

that the government’s closing argument was improper. The

court of appeals rejected all of those contentions, Pet. App. 3-

12, and petitioner does not renew any of them in this Court.

7

440 (1989). In a single proceeding, the issue of

whether cumulative punishment for two statutory

violations is compatible with the Double Jeopardy

Clause is solely a question of legislative intent. /d. at

451 n.10; Jones v. Thomas, 491 U.S. 376, 381 (1989);

Ohio v. Johnson, 467 U.S. 4938, 499 (1984); Missouri v.

Hunter, 459 U.S. 359, 368 (1983); Albernaz v. United

States, 450 U.S. 333, 343-344 (1981); Whalen v. United

States, 445 U.S. 684, 691-698 (1980). As this Court has

explained,

the question of what punishments are constitu-

tionally permissible [in a single proceeding] is not

different from the question of what punishments

the Legislative Branch intended to be imposed.

Where Congress intended * * * to impose multiple

punishments, imposition of such sentences does

not violate the Constitution.

Albernaz v. United States, 450 U.S. at 344; Missouri

v. Hunter, 459 U.S. at 369 (when the legistature

intends to authorize cumulative punishment ader

two statutes, “the prosecutor may seek and tho trod

court * * * may impose cumulative punishment under

such statutes in a single trial”).'

a

Petitioner’s reliance (Pet. 6) on Brown v. Ohio, 432 US.

161, 169 (1977), and Jeffers v. United States, 482 U.S. 137, 150

(1977), is misplaced. Brown involved the double jeopardy bar

against successive prosecutions for a greater and lesser offense;

it did not involve cumulative punishments imposed at a single

trial. Jeffers did involve an issue of multiple punishment, but

the plurality concluded that, because Congress did not intend

to allow cumulative punishment for the two statutory violations

in question, it was “unnecessary to reach the lesser-included-

4

Petitioner argues (Pet. 6-8) that Section 72038

should be viewed as a lesser included offense of

Section 7201, and that cumulative punishment for the

greater and lesser offenses is therefore unconstitu-

tional. The issue of whether Section 7203 is a lesser

included offense of Section 7201, however, does not

control the disposition of the multiple punishments

question. Garrett v. United States, 471 U.S. 773, 778-

779 (1985); Missouri v. Hunter, 459 U.S. at 368

(upholding cumulative punishment for greater and

lesser offenses when “the legislature intended that

punishment for violations of the statutes be cumula-

tive”). The “dispositive question” is whether Con-

gress intended to authorize cumulative punishment

for the two offenses, and in that inquiry, the “starting

point must be the language of the statutes.” Albernaz

v. United States, 450 U.S. at 336, 344.

Here, the language of the statutes, 26 U.S.C. 7201

and 26 U.S.C. 7203, and the overall statutory scheme

indicate that Congress intended to authorize cumula-

tive punishment for a single course of conduct that

violates both provisions. Both provisions state that

their penalties are “in addition to other penalties

provided by law.” 26 U.S.C. 7201, 7203.2. That lan-

offense issue.” 432 U.S. at 155. That analysis does not assist

petitioner here.

> Section 7201 provides:

Any person who willfully attempts in any manner to

evade or defeat any tax imposed by this title or the

payment thereof shall, in addition to other penalties

provided by law, be guilty of a felony, and upon conviction

thereof, shall be fined not more than $100,000 ($500,000 in

9

guage clearly indicates that penalties for the two

offenses may be cumulative. Moreover, in Spies v.

United States, 317 U.S. 492 (1943), this Court de-

scribed Section 7201 as “the capstone of a system of

sanctions which singly or in combination were

calculated to induce prompt and forthright fulfillment

of every duty under the income tax law.” Jd. at 497

(emphasis added). As the Seventh Circuit observed in

United States v. Foster, 789 F.2d 457, 460 (7th Cir.),

cert. denied, 479 U.S. 883 (1986), “[t]he structure of

the [criminal tax] statute—one broad felony followed

by a large number of related misdemeanors—sug-

gests different offenses.”

Ordinarily, the examination of whether “each

provision requires proof of a fact which the other does

not” under Blockburger v. United States, 284 U.S.

299, 304 (1932), “determines whether the crimes are

indeed separate and whether cumulative punishments

may be imposed.” Ohio v. Johnson, 467 U.S. at 499

n.8; Albernaz, 450 U.S. at 337. As this Court has

explained, “[t]he assumption underlying the Block-

burger rule is that Congress ordinarily does not

the case of a corporation), or imprisoned not more than 5

years, or both, together with the costs of prosecution.

Section 7203 provides, in relevant part:

Any person required under this title * * * to make a

return * * * who willfully fails to * * * make such return,

*** at the time or times required by law or regulations,

shall, in addition-to other penalties provided by law, be

guilty of a misdemeanor and, upon conviction thereof, shall

be fined not more than $25,000 * * * or imprisoned not

more than 1 year, or both, together with the costs of

prosecution.

10

intend to punish the same offense under two different

statutes.” Ball v. United States, 470 U.S. 856, 861

(1985). The Blockburger inquiry, however, “is not

controlling when the legislative intent is clear from

the face of the statute.” Garrett v. United States, 471

_U.S. at 779. Here, it is unnecessary to apply the

Blockburger test, because Congress's intent to per-

mit cumulative punishment is clear from the face of

the relevant provisions.

In any event, Section 7201 and Section 7203 satisfy

the Blockburger test as applied to the violations at

issue in this case, because each provision requires

proof of a fact not required by the other. To prove a

violation of Section 7201, the government must estab-

lish (1) the existence of a tax deficiency, (2) an

affirmative act of evasion or attempted evasion of the

tax due, and (3) willfulness. To prove a violation of

Section 7203, the government must establish (1) the

existence of a legal duty to file a tax return; (2) the

defendant’s failure to file; and (3) willfulness.

Sansone v. United States, 380 U.S. 343, 351 (1965).

Thus, Section 7201 requires proof of an affirmative

act of tax evasion, while Section 7203 does not, and

Section 7203 requires failure to file a return, while

Section 7201 does not. See United States v. Foster,

789 F.2d at 460." Thus, under all applicable rules of

" Section 7203 can be violated in several ways, and in

Sansone v. United States, 380 U.S. at 351, this Court held that

when the violation of Section 7203 is “the failure to pay a tax

when due,” that violation is a lesser included offense of tax

evasion under Section 7201. This case, unlike Sansone, does

not involve a charge under Section 7203 of failing to pay a tax

When due; rather, the indictment charges that’ petitioner

violated a different part of Section 7203, 7.e., he “willfully did

1]

statutory construction, cumulative punishment. is

permissible. .

b. Petitioner contends (Pet. 8-9) that the decision

in this case conflicts with decisions of other courts of

appeals. In United States v. Rosenthal, 454 F.2d 1252,

1255 (2d Cir.), cert. denied, 406 U.S. 931 (1972), the

Second Circuit stated that “on the facts here, the

crime defined in § 7203 was a lesser included offense

of that defined in § 7201,” and it concluded without

further analysis that “Congress did not intend two

punishments for the same offense.” In two Fifth

Circuit cases that arose soon after Rosenthal, the

government conceded that cumulative sentences for

violations of Section 7201 and Section 7203 were

improper, and the court of appeals agreed. United

States v. Newman, 468 F.2d 791, 793, 796 (1972), cert.

denied, 411 U.S. 905 (1973); United States v. Buckley,

586 F.2d 498, 504 & n.3 (1978), cert. denied, 440 U.S.

982 (1979). And in United States v. Snyder, 766 F.2d

167, 171 (4th Cir. 1985), the Fourth Circuit followed

Buckley in vacating cumulative convictions and

sentences for failure-to-file and tax-evasion_counts

covering the same years.”

fail to make the required tax return * * * [iJn violation of Title

26 United States Code, Section 7203.” Indict., Counts 2, 4, 6, 8,

10, 12 (emphasis added).

" Petitioner also cites (Pet. 9) a variety of other cases that

do not involve the issue in this case. In United States v.

Kaiser, 893 F.2d 1300, 1306 (11th Cir. 1990); United States v.

Lodwick, 410 F.2d 1202, 1206 (8th Cir.), cert. denied, 396 U.S.

841 (1969); and Gaunt v. United States, 184 F.2d 284, 288-290

(Ist Cir. 1950), cert. denied, 340 U.S. 917 (1951), the courts held

that a violation of 26 U.S.C. 7206(1) is a lesser included offense

of a violation of Section 7201 and that cumulative punishment

12

Although we agree with petitioner that those

decisions conflict with the Seventh Circuit’s ap-

proach, the issue of whether cumulative sentences

may be imposed for violations of Sections 7201 and

7203 does not require this Court’s resolution. First,

the rationale of the Second, Fourth, and Fifth

Circuits—that when one offense is a lesser included

offense of another the two cannot support cumulative

punishment—did not survive this Court’s decisions in

Garrett v. United States, supra; Ohio v. Johnson,

supra; Missouri v. Hunter, supra; and Albernaz v.

United States, supra.” As those cases make clear, the

permissibility of cumulative punishment for two

statutory violations turns not solely on whether one

offense is a lesser included offense of the other, but on

an examination of legislative intent. Here, the

language and structure of the relevant provisions

indicates Congress’s intention to permit cumulative

punishment. See pp. &-9, supra."

was therefore impermissible. Accord United States v. Gengo,

808 F.2d 1, 3-4 n.1 (2d Cir. 1986); United States v. Slutsky, 487

F.2d 832, 844-846 (2d Cir. 1973), cert. denied, 416 U.S. 937

(1974). This case, however, does not involve Section 7206(1).

* Rosenthal, Newman, and Buckley, were decided before

this Court had issued its decisions explicating the role of

legislative intent in multiple punishments analysis. Snyder was

decided after this Court’s cases in the area, but the court failed

to cite or apply those decisions.

“ In the context of deciding whether the jury should be

instructed regarding lesser included offenses, several courts

have held that the failure to file a tax return (Section 7203) is a

lesser included offense of tax evasion (Section 7201). See Pet.

8-9, citing United States v. Doyle, 956 F.2d 73, 74-75 (ith Cir.

1992); United States v. Cook, 505 F.2d 659, 664-665 (Sth Cir.

15

Second, the issue in this case does not warrant

review because it has quite limited practical signifi-

cance. Under the Sentencing Reform Act of 1984, 18

U.S.C. 3551 et seq., cumulative punishment for

violations of Sections 7201 and 7203 would not result

in a greater sentence absent the most exceptional

circumstances. Pursuant to the Sentencing Guide-

lines, when a defendant is charged with multiple

counts, “[a]ll counts involving substantially the same

harm shall be grouped together into a single ( rroup.”

Sentencing Guidelines §3D1.2. Under Sentencing

Guidelines § 3D1.2(d), grouping is required of the tax

offenses at issue here. See Sentencing Guidelines §

2T1.1 (“Tax Evasion”) and § 2T1.2 (“Willful Failure to

File Return, Supply Information, or Pay Tax”).

1974), cert. denied, 421 U.S. 1000 (1975); United States v.

Boone, 951 F.2d 1526, 1541 (9th Cir. 1991). Those cases are not

directly relevant here, because even assuming that a lesser

included offense instruction would be appropriate, that issue

does not control the question whether cumulative punishment

is permissible in a case in which both offenses are charged.

Moreover, those cases did not consider whether the failure to

file a return is a lesser included offense of tax evasion under

the “elements” test that this Court recently adopted in

Schmuck v. United States, 489 U.S. 705, 715-722 (1989).

Petitioner's case is highly unusual because the felony tax-

evasion counts were covered by the Sentencing Guidelines, but

the misdemeanor failure-to-file counts (which were completed

earlier) were not. Accordingly, the district court had

discretion to make the sentences for the felony and misde-

meanor counts consecutive. See note 2, supra. The cumula-

tive punishment issue presented in that context is unlikely to

recur. In a case governed exclusively by the Guidelines, as

most future cases will be, the option of consecutive sentences

will not be available.

14

Once related tax counts have been grouped, the

sentence is based on the total tax loss, not on the

number of statutory violations. Thus, under the

Guidelines, if a defendant is convicted of one count of

tax evasion, in violation of Section 7201, and one count

of willful failure to file a return, in violation of

Section 7208, those two counts would be grouped

together, and there would be no incremental

punishment for each “grouped” count. The offense

level would instead be established by determining the

amount of the tax loss and then consulting

Sentencing Guidelines § 27.14 (“Tax Table”). Only in

a rare case—where, for example, the defendant has a

criminal history category of I and the tax loss

exceeds $80,000,000, or the defendant has a criminal

history category of II or III and the tax loss exceeds

$40,000,000—will the sentencing court be required to

consider a term of imprisonment longer than five

years." Tax losses of that magnitude are infrequent.

Accordingly, for those offenses occurring after

November 1, 1987, it is extremely unlikely that

convictions under both Section 7201 and Section 7203

would result in any difference in the length of the

defendant’s sentence."

'! Section 7201 authorizes a maximum term of imprisonment

for a single count of five years. 26 U.S.C. 7201. Thus, a

failure-to-file misdemeanor will not be relevant to the sentence

absent the extreme degree of tax loss described in the text.

' Under Ball v. United States, 470 U.S. 856, 864-865 (1985),

when Congress does not intend a defendant to be punished

under two statutes, a trial court must enter judgment on only

one of the statutory offenses. Thus, if petitioner’s position

were accepted, it would require courts to enter judgments of

conviction on the Section 7201 count alone, rather than on both

15

2. Petitioner contends (Pet. 12-19) that the gov-

ernment’s introduction of evidence of his evasion of

payment of taxes, in violation of 26 U.S.C. 7201,

constructively amended the indictment, in violation of

his rights under the Fifth and Sixth Amendments.

The court of appeals correctly rejected that claim,

Pet. App. 4, and its ruling does not conflict with any

decision of this Court or any other court of appeals.

A constructive amendment of an indictment occurs

if the indictment’s charging terms are altered “by the

presentation of evidence and jury instructions which

so modify essential elements of the offense charged

that there is a substantial likelihood that the

defendant may have been convicted of an offense other

than that charged in the indictment.” United States

v. Hathaway, 798 F.2d 902, 910 (6th Cir. 1986); see also

Stirone v. United States, 361 U.S. 212, 218-219 (1960);

United States v. Mollica, 849 F.2d 723, 729 (2d Cir.

1988); United States v. Dunn, 758 F.2d 30, 35 (st Cir.

1985); United States v. Von Stoll, 726 F.2d 584, 586

(9th Cir. 1984); United States v. Davis, 679 F.2d 845,

851 (11th Cir. 1982), cert. denied, 459 U.S. 1207 (1983).

In this case, both the evidence and the jury instrue-

tions conformed to, rather than modified, the charges

in the indictment.

the Section 7201 and Section 7203 counts. We are unaware,

however, of any collateral consequences to a defendant of

having both a felony and misdemeanor tax conviction on his

record, rather than having just the felony tax conviction. The

misdemeanor would appear to add little or nothing to the

impact of the sentence. Thus, even if petitioner were correct

on the cumulative punishment issue, it has insufficient

practical future consequence to warrant this Court's review.

16

Counts 1, 3, 5, 7, 9, and 11 charged petitioner with

attempted tax evasion for 1982 through 1987, in

violation of 26 U.S.C. 7201. Section 7201 imposes

criminal penalties on “la]ny person who willfully

attempts in any manner to evade or defeat any tax

imposed by this title or the payment thereof.” 26

U.S.C. 7201 (emphasis added). The pertinent lan-

guage of the tax evasion counts in this case tracked

the italicized portion of the statute by charging that

petitioner “willfully and knowingly did attempt to

evade and defeat said income tax due and owing to the

United States.” Each count then identified the

manner in which petitioner evaded the tax: “by failing

to make such income tax return”; “by failing to pay

said income tax”; “[bl]y causing his employer to stop

withholding federal income tax”; and “(bly endorsing

his earnings checks to other individuals and instit-

utions.”

Petitioner acknowledges (Pet. 16-17) that the in-

dictment charged him with attempted evasion of

assessment of his taxes. He claims, however, that by

introducing evidence regarding his failure to pay his

taxes the government constructively amended the

indictment to include a charge of attempted evasion of

payment. The introduction of evidence that defendant

failed to pay his taxes, however, was consistent with

the allegations of the indictment: the indictment

alleged that failure to pay taxes was one of several

means by which defendant attempted to evade his

taxes."

5 Petitioner’s suggestion (Pet. 16) that he would have

altered his defense if he had been charged with evasion of

payment is without force. The indictment gave petitioner

17

Petitioner’s claim that the government amended

the indictment by introducing evidence regarding the

attempted evasion of payment of taxes rests on the

erroneous premise that evasion of assessment and

evasion of payment cannot be proved by the same

affirmative acts. Although Spies v. United States,

317 U.S. at 498-499, construed Section 7201 to require

proof of an affirmative act of evasion, it did not

require that the affirmative act exclusively support

either attempted evasion of assessment or attempted

evasion of payment. Nor do any of the cases cited by

petitioner suggest such a requirement. Rather, both

the First and Fifth Circuits have recently held that

the same conduct can constitute both an attempt to

evade payment and an attempt to evade assessment.

United States v. Waldeck, 909 F.2d 555, 560 (1st, Cir.

1990) (filing false W-4 forms “may be used as evidence

of either evasion of assessment of tax or evasion of

payment of tax or both”); United States v. Masat, 896

F.2d 88, 91 (5th Cir. 1990) (assigning income and

property to nominees and filing false W-4 forms “are

acts constituting both evasion of payment and evasion

of assessment”). Thus, the evidence introduced by

the government was designed to show, and did show,

that petitioner was guilty of the attempted evasion

offense charged in the indictment.

The jury instructions were also consistent with

the theory of the indictment that petitioner attempted

notice that his failure to pay taxes was at issue. Moreover,

petitioner's claim of prejudice ignores his admission that he had

stopped filing returns and paying income taxes; his defense was

based on lack of willfulness because of his supposed belief that

wages were not income.

ls

to evade and defeat taxes; they did not give the jury

the option of convicting petitioner of attempted

evasion of payment. The district court’s description

of Section 7201 referred only to an attempt “in any

manner to evade or defeat any tax imposed by this

title,” without any reference to evasion of payment

(Instruction 9), and the court’s recitation of the

elements of the offense made no reference to evasion

of payment (Instruction 3). Accordingly, petitioner's

claim that he was tried on a theory that departed from

the indictment is without merit."

5. Petitioner contends (Pet. 19-25) that Sentencing

Guidelines § 3C1.1, which provides for a two-level

increase in the base offense level when the defendant

obstructs or impedes justice, cannot constitutionally

be applied te a defendant who testifies falsely at trial.

That issue is currently before the Court in United

States v. Dunnigan, No. 91-1300 (to be argued Dee. 2,

1992). Accordingly, the Court should hold the petition

as to that issue and dispose of it in light of the

decision in Dunnigan.

1. Petitioner asserts (Pet. 25-28) that the district

court’s instruction with respect to whether peti-

tioner had a good-faith belief in the lawfulness of his

conduct was inconsistent with Cheek v. United

Because petitioner was charged with and convicted of

only evasion of assessment of taxes, this case does not present

the question whether Section 7201 defines one offense or two

separate and distinct offenses. See Pet. 12-15. Nor, as peti

tioner acknowledges, does it present the question whether

Section 7201 authorizes cumulative punishments for evasion of

assessment and evasion of payment of a single year’s tax. See

Pet. TS-19

19

States, 111 8. Ct. 604 (1991). The court of appeals

correctly rejected that contention, and it warrants no

review here."

In Cheek, the Court held that it is error to instruct

the jury that a defendant’s good-faith belief must be

objectively reasonable to negate willfulness. 111 S.

Ct. at 611. The district court gave no such instruc-

tion here. It instructed (Pet. App. 8):

A defendant does not act willfully if he believes in

good faith that he is acting within the law or that

his actions comply with the law. Therefore, if the

defendant actually believed that what he was doing

was in accord with the tax statutes, he cannot be

said to have had the criminal intent to willfully

evade or defeat taxes or to willfully fail to file tax

returns. This is so even if defendant’s belief was

not objectively reasonable as long as he held the

belief in good faith. Nevertheless, you may con-

sider whether the defendant’s belief about the tax

statutes was actually reasonable as a factor in

deciding whether he held that belief in good faith.

That instruction informed the jury that it should

apply a subjective standard, and it neither stated nor

implied the limitation rejected in Cheek that a good-

faith belief must be objectively reasonable in order to

negate willfulness. To the contrary, the jury was

explicitly instructed that “even if [petitioner’s| belief

was not objectively reasonable,” petitioner could not

be said to have possessed the requisite criminal

' As the court of appeals noted, petitioner conceded at trial

that the district court’s instruction “is essentially a correct

statement of the law.” Pet. App. &.

20

intent “as long as he held the belief in good faith.”

Pet. App. &.

Petitioner suggests that the court’s use of the

phrases “actually believed” and “actually reasonable”

represented an attempt “to retain the essence of the

Seventh Circuit’s erroneous ‘objectively reasonable’

standard.” Pet. 26. The phrase “actually believed,”

however, directed the jury to focus its inquiry on

petitioner’s actual state of mind, and the sentence in

which the phrase “actually reasonable” appeared

made it abundantly clear that reasonableness was

simply a factor that the jury could consider in

ascertaining petitioner’s actual state of mind.'®

Contrary to petitioner’s contention (Pet. 27), the

decision of the court of appeals does not conflict with

'© This Court suggested in Cheek that such consideration is

appropriate. See 111 S. Ct. at 611-612 (“Of course, the more

unreasonable the asserted beliefs or misunderstandings are, the

more likely the jury will consider them to be nothing more

than simple disagreement with known legal duties imposed by

the tax laws.”). Accord United States v. Barnett, 945 F.2d

1296, 1299 (5th Cir. 1991) (upholding instruction allowing jury

to consider the grounds on which a defendant based his claim of

good faith in determining whether he actually acted in good

faith), cert. denied, 112 S. Ct. 1487 (1992); United States v.

Collins, 920 F.2d 619, 622-623 (10th Cir. 1990) (upholding

instruction that “if you regard [defendant’s] belief as being

highly unreasonable, you may consider this along with all other

evidence on the question of whether his belief was indeed

genuine or merely feigned”), cert. denied, 111 S. Ct. 2022

(1991); United States v. Turano, 802 F.2d 10, 11 (ist Cir. 1986)

(“The jury * ** must use whatever evidence they can to

determine what |defendant} believed. The more unreasonable

the defendant's alleged belief that he did not have to file a tax

return, the less likely he, in fact, held that belief.”).

ili

United States v. Powell, 955 F.2d 1206 (9th Cir. 1992).

In Powell, the court specifically recognized that the

jury may consider the “reasonableness” of a defen-

dant’s alleged beliefs in determining whether he

actually held them. /d. at 1212. The Powell court

held, however, that the instruction in that case was

deficient because “it did not make clear that the

defendant must demonstrate only that a subjective

good faith belief is held and not that the belief must

also be found to be objectively reasonable.”'* [b/d.

Powell is inapposite here, as the instruction given at

petitioner’s trial expressly stated that a good-faith

belief would negate willfulness “even if defendant’s

belief was not objectively reasonable as long as he

held the belief in good faith.” Pet. App. 8.

CONCLUSION

The petition for a writ of certiorari should be held

as to the third question presented and disposed of in

The Powell instruction stated that “if a person acts

without reasonable grounds for belief that his or her conduct is

lawful, it is for you to decide whether the defendants acted in

good faith.” 955 F.2d at 1211. In our view, Powell's criticism

of that instruction is unwarranted; the instruction is a standard

jury instruction, see 2 FE. Devitt, C. Blackmar & K. O'Malley,

Federal Jury Practice and Instructions § 56.26, at 1044 (4th

ed. 1990), and clearly directs the jury to acquit the defendants

if the jury concludes that the defendants genuinely believed

that they were not required to file returns—regardless of

whether that belief was reasonable. The instruction has been

upheld by most of the courts of appeals that have addressed the

issue! See United States v. Whiteside, 810 F.2d 1306, 1311 (Sth

Cir. 1987); United States v. Payne, 800 F.2d 227, 229 (10th Cir.

1986); United States v. Aitken, 755 F.2d 188. 190 (1st Cir. 1985)

That instruction, however, is not at issue in this case.

‘)>s)

—

light of United States v. Dunnigan, No. 91-1300 (to be

argued Dec. 2, 1992). As to the other questions pre-

sented, the petition should be denied.

Respectfully submitted.

KENNETH W. STARR

Solicitor General

JAMES A. BRUTON

Acting Assistant Attorney General

ROBERT E. LINDSAY

ALAN HECHTKOPF

GAIL BRODFUEHRER

Attorne ys

NOVEMBER 1992